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Analysts Cheer Absolute Software's Q4 Beat While Remaining Cautious

  • Absolute Software Corp (NASDAQ: ABSTclocked Q4 adjusted revenue growth of 70% to $54 million, beating the consensus of $53 million.

  • EPS loss of $(0.10) beat the consensus loss of $(0.11).

  • Raymond James analyst Adam Tindle maintained Absolute Software with an Outperform and raised the price target from $14 to $16.

  • The re-rating followed Q4 results that close out a second consecutive year of "Rule of 40" performance (key SW metric: sum of growth + profitability) and initial FY23 guidance that suggests this will likely continue.

  • The re-rating followed the NetMotion acquisition that closed just over a year ago, and the since rebranded Endpoint and Access product portfolio has taken shape.

  • He envisions further synergy over time via extending the core persistence value prop across a broader platform and interesting initiatives around data/telemetry that are consistent with secular trends in next-gen security postures.

  • He sees a disconnect between healthy double-digit ARR growth & EBITDA margin and the valuation of ABST relative to other assets that exhibit these characteristics. However, he suspects a solution over time via outperformance in the stock.

  • BMO analyst Thanos Moschopoulos reiterated Market Perform with a price target of $11.50.

  • He raised his estimates following upbeat results.

  • Moschopoulos remains on the sidelines as he would like better comfort on ABST's longer-term competitive prospects in ZTNA.

  • However, he saw more upside than downside to the stock given its valuation, ABST's execution under its current leadership, and a potentially accelerating growth trajectory.

  • Price Action: ABST shares traded higher by 18.98% at $12.16 on the last check Wednesday.

Latest Ratings for ABST

Date

Firm

Action

From

To

Feb 2022

TD Securities

Upgrades

Hold

Buy

Feb 2022

Raymond James

Maintains

Outperform

Aug 2021

TD Securities

Downgrades

Buy

Hold

View More Analyst Ratings for ABST

View the Latest Analyst Ratings

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